From your screenshot I gather that you are using Windows 8 with a wireless connection, am I right? First check in Device Manager that you only have one network active. If there are 2 or more it can confuse the software. Also open IE and check that it can reach the outside world, the reason for that is that McAfee uses IE for its functions.
When you ran MVT did it indicate issues?
Maybe also try calling Technical Support and the link for your area is: http://service.mcafee.com/faq/country.html
Thanks for the reply! Yes I am using Windows 8 with wireless connection. Checked IE & network but the problem still the same. When I ran MVT it says found no problem on my computer. I wonder since I keep getting the update error message, will my pc McAfee anti virus still work? As in protect my pc from any viruses or other threats.
Then I would phone Technical Support as I suggested.